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The Department of Human Services paid $2.84billion because of error and fraud, but only prosecuted 709 people, despite investigating 13,595 fraud cases (pictured is Centrelink in Craigieburn, Melbourne)

Newstart benefits for the unemployed were overpaid by $424million.

On average, 2.4million people received $1,174 each throughout the year, racking up a $1.6billion debt for taxpayers, the publication reported.

The names of more than 114,000 suspected welfare cheats were turned in to the department last year, identifying $40million in overpayments, according to Human Services Minister Michael Keenan.

'Some tip-offs may refer to an investigation that is already underway (and) it sometimes receives multiple tip-offs about the same subject,' he told The Daily Telegraph.

A DHS spokeswoman told the publication that the debts arose from 'changes in personal circumstances and people either inadvertently or deliberately providing incorrect information'.

'The recovery of a debt may not occur immediately in full or within the same financial year,' she said.Play

On average, 2.4million people received $1,174 each throughout the year, racking up a $1.6billion debt for taxpayers (pictured is Centrelink in Craigieburn, Melbourne)